Features/ Opinions

Air Peace, Dangote and the monster of country-of-origin challenges in international business

By Ikem Okuhu

On March 30, 2024, Air Peace, Nigeria’s biggest airline by miles announced the commenced of daily flights on the lucrative Lagos-London route to the excitement of Nigerians who have for years battled with the discriminatorily exorbitant fares charged by British Airways, Virgin Atlantic, and other international carriers on that route.

While Nigerians were still celebrating the twin gains of a Nigerian airline flying Lagos-London and the significantly lower fees it brought upon the route, two other problems began to rear their heads. The first happened on April 6, 2024, when the Chief Executive Officer of the airline, Allen Onyema accused officials of the Federal Airports Authority of Nigeria (FAAN) of attempting to make it to land its bird at a rejected part of the Murtala Muhammed International Airport in Lagos. Four days after, on April 10, Onyema was in the news again, raising the alarm on what he said was a conspiracy of some international airline operators to impede its operations and cited ground handling and space allocation at Gatwick Airport as an example.

Station Two

Unlike Air Peace which used two different events to announce the conspiracy of local and foreign forces causing its headache, Dangote Refinery and Petrochemicals used one stone to kill the two birds of prey frustrating its progress.

The Managing Director of the refinery, Devakumar Edwin, on June 24, 2024, at a forum with journalists, alleged that International Oil Companies in Nigeria have planned to frustrate the survival of the new refinery.

Edwin told the journalists that the IOCs were “deliberately and willfully frustrating” the refinery’s efforts to buy local crude by hiking the cost above the market price, forcing the refinery to import crude from countries as far as the United States, with its attendant high costs.

At the same event, he also accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of granting licenses indiscriminately to marketers to import dirty refined products into the country.

In emphasizing the indiscriminate importation of dirty refined products, I suspect that the helmsman at Dangote Refinery was only out to highlight how the licensing of new importers by NMDPRA is creating local sales difficulties for what is coming out of the refinery. No one would believe a government agency would grant licenses to import dirty refined petrol. Nobody will miss the points made by the two Nigerian giants that businesses of Nigerian origin battle local and foreign demons to play on the international stage.

It would be naïve for either Air Peace or Dangote to claim they did not expect competition to throw darts at them, and this is explained in the simple economic term of opportunity cost. If Air Peace moves 300 passengers in one flight to and from the United Kingdom, thousands of Pounds Sterling are lost to the other operators while the Nigerian carrier gains. This is not calculating the millions lost following the near rock-bottom fares charged by Allen Onyema’s bird. On the side of Dangote, it would also be expected that the multinational oil companies who mine crude oil from Nigeria but have refused to build refineries would greet the entry of Dangote with celebratory confetti. Most of them have their refineries abroad from where the imports have kept local refining in the realms of wishful thinking. Their Nigerian partners, who make millions from fuel importation would not be expected to join Dangote to celebrate his new opportunity all because of certain advertised national interests.

Country-of-origin branding and global competition

Except things change, and quite radically too, both Dangote and Air Peace should get used to the shenanigans of international competition. Things won’t change soon as Nigeria has not learned any lessons in exploiting diplomacy to market our businesses overseas. This is the only country that I know where businessmen leave for other countries without relying on the flag and banner of their country to push their wares. As tarnished as the Nigerian brand is internationally, our government has not done anything to improve things. If, for instance, our government is attending the Dubai Air Show, which will take place in November, it will arrive there with a delegation of politicians and children of government officials rather than airline operators. I do not foresee that a President Tinubu will remember to travel with Dangote and other players in the Nigerian petroleum refining ecosystem when the legions of hangers-on around the government have not all booked their seats.

There is almost no value that Nigeria as a country can offer any business seeking to plant its roots abroad, especially in Europe and America and that is why Air Peace and Dangote have had to contend with the bottlenecks they have complained about: the country of origin stamp is almost absent on the services they offer, and even as weak as our brand valuation is, internationally, our government hasn’t helped with the distance it keeps from individuals and businesses venturing abroad.

It is called Country-of-Origin branding in marketing. That was why the German government stayed through the negotiation and conclusion of the deal that gave Siemens the equipment supply deal in Nigeria’s Presidential Power Initiative. That was also why other things out of Germany have been perceived to be strong, rugged, and reliable. It’s also why the guys at Gatwick Airport were putting those impediments against Air Peace: they want the companies from their own country to dominate, and they know there might not be retaliatory action from Nigeria.

Country of Origin Branding can be traced back to the late 19th century when the English government, to reduce sales of German and other non-English products to English consumers, passed a law requiring products manufactured outside England to be labeled with their country of origin.

Writing in Branding Strategy Insider, Danish author and marketing consultant, Martin Roll, said Country-of-Origin branding has proven that “country associations do lead to customer bias. Such bias is based on the image of the country in customer’s minds. This leads to the next obvious question – what constitutes an image of a country? What makes France the best country for wines, what makes Germany the best in engineering, and what makes Switzerland the best in watch manufacturing? Many factors contribute to the country’s image.”

The US was harsh on, Chinese tech company, Huawei in 2019 when Donald Trump accused it of being a security risk, something Huawei denied. Many people did not know that Huawei was pioneering the 5G technology and America would lose billions if the Chinese were the first to enter the market. Again, under the administration of Joe Biden, when TikTok, a Chinese social media platform posed challenges to America’s Facebook, Twitter, and Instagram, The US government stooped forward to accuse the company of being a security risk and moved for it to be sold to American interests.

Country-of-origin branding also provides the fillip for the audacious moves brands make in confronting hostile competition in the international market, the types Air Peace and Dangote have grumbled about. But we were all witnesses to the diplomatic spats of the past years between the United States and China. Many would dismiss those heated exchanges with the casual wave of the capitalist versus communist, east versus west hand, oblivious of the marketing underpinnings.

The US was harsh on, Chinese tech company, Huawei in 2019 when Donald Trump accused it of being a security risk, something Huawei denied. Many people did not know that Huawei was pioneering the 5G technology and America would lose billions if the Chinese were the first to enter the market. Again, under the administration of Joe Biden, when TikTok, a Chinese social media platform posed challenges to America’s Facebook, Twitter, and Instagram, The US government stooped forward to accuse the company of being a security risk and moved for it to be sold to American interests.

What is important in the two examples cited is that China did not leave Huawei and TikTok out in the cold; it followed the American government, sanction for sanction and that is why both businesses are still out there. Huawei for instance, has grown to become a giant, grossing more than $97 billion in revenue in 2023.

The support by the Chinese government has triggered the situation where the media now identify these companies as, “China’s Huawei” and “China’s TikTok”. I am not even sure whether the Nigeran tag would help the cause of either Air Peace or Dangote because the country has eroded so much that it stands for nearly nothing and has also worked hard to limit the operations of the same brands it should be giving leverage going into the global marketplace.

This brings us to the second issue – the role of Nigerian agencies in contriving impediments to the country’s private sector flag carriers. Does anybody know why FAAN would rather have Air Peace experience unfavourable passenger discharge experiences than foreign-owned airlines? Can anybody tell why the guys at the Nigerian Midstream and Downstream Petroleum Regulatory Authority would rather work with multinational oil companies to create an unfair operating climate for Dangote Refinery?

The answer, unfortunately, is still buried in the Country-of-Origin branding we have been talking about here. Through subtle consumption of media messages and the consequent acculturation, those Nigerians who work in those agencies feel the foreign companies are superior to the “pretenders” from Nigeria. They have grown to distrust the Nigerian brand and feel more comfortable promoting and leveraging the interests of foreign interests against those of their country.

If in doubt, ask Mike Adenuga at Globacom. His effort to play in the then newly introduced GSM market was dashed between 1999 and 2001, when factors that included local conspiracy took his license, even after he had paid a $20 million nonrefundable fee, leaving the field to foreign players. His return, years later with Globacom had to also confront the twin monsters of pricing and other conspiracies to operate. Today, Globacom had to fight its way from a struggling number 4 to the country’s number 2, behind only MTN and ahead of Airtel which was in the market two years before it began operations.

Just imagine if there was a Country-of-Origin support for Adenuga and the bragging rights the country would have had.

But even with the difficulties, Adenuga has taken Glo to a couple of African countries, which is a good reason for Air Peace and Dangote to divert the energy they invest in complaining against the Nigerian establishment into building their brands in the global marketplace. Even though it might cost them ten times more and take much longer than their competitors from nations of stronger brand perception, they will surely get there one day.

The dogged Nigerian spirit will see them through.

Ikem Okuhu is a journalist, a Public Relations professional, brand strategist and teacher. With a career that traversed Print Media, Oil & Gas, Banking and entrepreneurship, Ikem is the author of wave-making book; PITCH: Debunking Marketing’s Strongest Myths, a dispassionate exposition of the dos and don’ts of successful engagement in the marketplace, especially the Nigerian marketplace. He is the founder/publisher of BRANDish, Nigeria’s first nationally circulating Brands and Marketing magazine. He has also handled the PR and reputation management consultancies for a number of brands, businesses and public figures.

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